Ryanair’s €20m Mess

Ryanair 20m euro compensation mess
18/9/2017 Ryanair Press Conferences. Ryanair’s CEO Michael O’Leary, discusses recent flight cancellations, at Ryanair HQ, Airside Business Park, Dublin. PhotoLeah Farrell/RollingNews.ie

EU law requires compensation of €250 to €400 stansted airport will see 83 flights a day dropped

Ryanair is facing a €20m compensation bill after cancelling more than 160 flights, and leaving up to 40,000 passengers stranded. The budget airline confirmed this week that it’s dropping 40 to 50 flights a day over the next six weeks.

The most seriously affected airport, by far, is London Stansted with twice as many flights as Dublin being dropped. Passengers have spent since the weekend trying to find out if their bookings have been cancelled. EU law requires compensation of €250 to €400 for cancelled flight of 1,500km or less and €400 for between 1,500km and 3,500 km. Speaking at a hastily arranged press conference in Dublin earlier this week, its under-fire chief executive, Michael O’Leary, confirmed that all passengers affected by the flight cancellations will be entitled to a place on an alternative flight, or a full refund, as per EU rules.

Mr O’Leary said the cancellations will cost the company “around €5m over the next six weeks and compensation of up to €20m”.

He also confirmed that passengers will also be entitled to claim compensation, but only those whose flights are affected “over the next two weeks”.

“They will all be entitled to their EU26 world compensation entitlements. We will not be trying to claim exceptional circumstances. This is our mess up,” said Mr O’Leary. “When we make a mess at Ryanair we come out with our hands up and try to explain why we’ve made the mess.

We will pay compensation to those customers who are entitled to compensation, which will be those flights that are cancelled over the next two weeks.”

Ryanair blamed the decision on having “messed up” its pilots’ holiday rota, with the company switching its holiday year from a fiscal one to a calendar year by 1 January 2018. Mr O’Leary said the airline made the decision to cut two per cent of its schedule was because its punctuality had “fallen from 90 per cent to under 70 per cent”.

The airline has worked hard on transforming its image from the “nasty” airline to a more caring company and it has been good for profits. Mr O’Leary even said publicly that if someone had told him at business school that being nice was so profitable he would have done it long before now.

Referring to the current PR debacle – which saw as much as €1.2 billion knocked off the airline’s share value in the past week – he said there would be a reputational hit from cancelling flights to and from destinations including Barcelona, Brussels, Lisbon, Madrid, Milan and Rome, which would not help future bookings. Its share price rallied, recovering up to half its lost value, but it will still be hugely costly for the world’s most profitable airline.

“Have I damaged Ryanair’s reputation with these cancellations? Yes but I would rather damage the reputation of Ryanair by cancelling two percent of our flights than significantly delaying forty percent of our flights,” he said.

Ryanair 20m euro compensation mess

Referring to start-up rival airline Norwegian Air’s claim it had hired 140 of Ryanair’s pilots this year, O’Leary countered the company had only lost “less than 100 of its 4,200 pilots” and had even recruited some from its rival.

This meant the airline was well within its capacity to fully crew its peak schedule, he said. Britain’s Aviation Minister Lord Callanan led demands that travellers be fully compensated as is required under EU law. Lord Callanan said: “We expect all airlines to fulfil their obligations to their customers and do everything possible to notify them well in advance of any disruption to their journey.

“In the event of any disruption or cancellation, airlines must ensure customers are fully compensated and every effort is made to provide alternative travel arrangements.”

The European Commission said the low cost airline had to comply with EU rules on passenger rights, including possible reimbursement and compensation, over its plans to cancel between 40 and 50 flights per day until the end of October.

“Airlines operating in the EU need to respect the European rules…. Passengers whose flights are cancelled have a comprehensive set of rights,” a Commission spokesman told a news conference.

“We have to check if all this is respected by Ryanair. For instance, you are entitled to reimbursement if you are not warned two weeks in advance,” he said. Ireland’s Aviation Regulation Commissioner Cathy Mannion said Ryanair fully accepts that it will have to pay all compensation claims. She said: “They fully accept that they have to pay up all the rightful compensation claims and all the care and assistance.

“If Ryanair have cancelled your flight, they must offer you an alternative flight at the earliest opportunity or refund your ticket.

Mr O’Leary added: “We are not short of pilots. What we have messed up is the allocation of holidays. We don’t have enough stand-by coverage to cover the inevitable disruptions that happen – air traffic control disruption and weather.”

“We don’t have enough pilots in September and October to allocate the leave.

“As we take disruptions – eg thunder storms this weekend in Barcelona – and as crew and aircraft get stuck, there are no back-up crews available.

“We need to take out about 50 flights a day over the next six weeks while we have these crewing issues.”
The airline said the disruption will not extend beyond the end of October

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